Scotland protests tax on North Sea energy work

A tax on oil rigs operating in the North Sea would have serious consequences for activity in Scottish waters, Scottish Energy Minister Fergus Ewing said.

Ewing said the region's energy sector needs a predictable set of governing policies in order to thrive. Tax policies that would make it more expensive to operate in the North Sea are counterproductive.

"This tax on oil rigs could cause serious problems for the oil industry in Scotland by reducing the availability of rigs and in turn driving up production costs," he said Sunday. "These changes will weaken the industry by destabilizing future investment plans and undermine industry confidence."

Industry officials have said exploration and production budgets are low and a proposed tax increase would harm the British energy sector.

Ewing said the Scottish waters may be more attractive to energy investors if voters pass a September referendum to break off from the United Kingdom.

"There have been numerous changes in the oil and gas fiscal regime in recent years, giving the U.K. a reputation for unpredictability which is not helpful in attracting investment," he added.

The Scottish government aims to support itself through oil and gas revenue while powering its economy on renewable resources.